No Reversal Yet for the Wells Fargo Candlestick Pattern

 | Feb 06, 2018 | 11:24 AM EST
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We wrote about Wells Fargo (WFC) yesterday morning before the opening, saying "If you are long WFC from before or bought a 1/3 position on my suggestion I would continue risking a close below $58. This position will need to be watched closely in case another shoe drops." Let's check and see if the shoe has a red sole or not.

In this daily Japanese candlestick chart of WFC, below, we can see the sharp downside price gap or what the Japanese technicians call a window. The Japanese consider falling windows, or gaps in a down move, as resistance until the window is "closed." Trading volume was extremely heavy Monday with volume topping 100 million shares. Huge.

Looking at slow stochastic indicator in the bottom panel we can see that this decline could be considered "oversold." Prices can get more oversold and can stay oversold. Oversold in a uptrend can be a buying opportunity. Oversold in a downtrend is another thing. Today's trading is not over by any means but right now if the closing bell was rung today's candle is not a reversal pattern.

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